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Brexit Weekly: 5 things (30th June)

Date: Friday 30th June 2017

Posted in:
EU News, Industry News, Opinion Pieces

Chuka puts Labour in a spin

Following the general election result, morale within the Labour Party was high. But three weeks on, the internal fault lines over Brexit are re-emerging. During last night’s vote on the Queen Speech, 50 of the Party’s MPs chose to defy the whip and supported an amendment to stay in the Single Market, led by Chuka Umunna. The leadership has moved quickly to sack three front benchers who voted with the backbenchers, with Deputy Tom Watson telling Channel 4 that he was very disappointed by Chuka Umunna’s decision. The Member of Parliament for Streatham is famed for his former career as a garage DJ, and this latest move has turned the tables on Jeremy Corbyn. Whilst the party managed to tip-toe around the Brexit issue during the election campaign, it appears the honeymoon period is now over.

Open Cabinet

The Conservatives faced their own problems with party discipline on Brexit this week. Disagreements over the preferred approach for post-Brexit trade deals surfaced on Tuesday, with Brexit Secretary David Davis accusing the Chancellor of inconsistency, whilst Philip Hammond appeared to mock the Foreign Secretary during a speech in Berlin in which he emphasised compromise was “the art of dividing a cake in such a way that everyone believes he has the biggest piece”. Some commentators have observed this as early tussling between the three front-runners to replace Theresa May as Prime Minister. But with self-preservation the number one priority for the Government, it appears that a leadership challenge has been put on hold for now – with many hopeful that alternative candidates emerge over the coming parliament.

“Will the last person to leave Britain please turn out the lights?”

UK employers are already being impacted by Brexit, according to a study released by Deloitte this week.

Deloitte’s research found a third of non-British workers in the UK were thinking about leaving the country over the next five years. More alarmingly, 26% of migrant workers said they may depart within the next three years, before the effect of Brexit is likely to have truly hit home. Perhaps surprisingly, it is highly skilled workers who are more likely to leave, and we’ve already seen the impact on EU nurse registrations since the Brexit vote last June. The Department of Health has introduced a retention programme for nurses, which is being described as a ministerial priority. But in reality, this might be too little, too late given the wider staff shortages and decreasing morale in our health service.

Having been side-lined during the recent general election debate, it appears that major business leaders are re-discovering their voice in the Brexit debate. Expect a more co-ordinated approach from business advocacy groups over the coming months, with a post-Brexit plan for employment top of the wish list.

Signed, sealed, delivered

Theresa May finally concluded a ‘confidence and supply’ agreement with the Democratic Unionist Party (DUP) this week. But support has come at a cost of £1 billion, to be sent off to Northern Ireland for infrastructure and health spending. Opposition parties were quick to frame the deal as a bung for Northern Ireland, with each DUP MP effectively worth £100 million – more than the transfer fees paid for Ronaldo, Pogba and Bale. The most crucial part of the deal for May is that the DUP will support the Conservatives on all Brexit legislation rather than considering things individually, which should ease the Bills’ passage through the Commons. Whilst few think that the deal will last the entire parliament, last night’s Queen Speech vote means Mrs May has passed her first major hurdle since the election.

Show me the money

The European Commissioner with responsibility for the budget has warned this week that Brexit could lead to a major hole in the EU finances – up to £20bn a year. Not only are the UK currently net contributors to the EU budget, there is a need to finance new programmes in areas like defence and security which could double the size of the gap. Commissioner Günther Oettinger has suggested that countries such as Germany, Austria, the Netherlands and Sweden – which like the UK received money back from their contributions – could lose that rebate in 2020. However, it potentially also provides an incentive for the EU to come up with a good deal for the UK, which offers significant amounts of single market access in return for continued budget contributions.